The problem you are having seems like a carburetor problem to me. When an engine is left over the winter, any gas that is left in the carburetor will turn to gum and varnish and can cause the carburetor to overflow past the needle and seat. This can then cause the engine to run very rich and run rough. It also can cause gas to enter the oil and then tin out the oil, thus causing the problem with the oil coming out.
Here is my comprehensive carburetor and fuel answer that may give you some ideas.
As engines sit or get older, fuel that is left in the carburetor can turn to gum and varnish and cause this and other problems. Also, any gasoline that was left in a gas can for a period of more than 30 days must be discarded because it also has begun to turn to varnish.
Today's gasoline's contain MTBE and alcohol. (Ethanol) They turn to "Junk and garbage" very quickly. Alcohol is partially water (H2O). And they call it "Oxygenated fuels! It is the oxygen that breaks down the organic compounds in the fuel and turns the gas to "Garbage" (Gum and varnish) The fuels we had just a few years ago had no alcohol in it and would store for longer periods of time before going stale... and fuel stabilizers do almost nothing to prevent the fuel from going bad with the changes in today's fuels.
Do not buy gas from the "Discount" Stations. The discount stations get a reduced price on gas because they may be buying fuel that is nearly 30 days old already. You may be getting fuel that's nearly stale right from the pump when buying from a discount station. Purchase your fuel from the well-known stations such as Shell, BP, Sonoco, Phillips 66 etc.
More than 70% of all of our repairs in our lawn mower business are due to this same issue. You most likely have dirt, gum, varnish...etc in your carburetor plugging up the small passageways and jets in the carburetor.
The carburetor must be removed from the engine. Clean all parts with carburetor cleaner and blow out all the small holes and passageways with compressed air. Remove all of the non-metallic parts since the carburetor cleaner will cause them to be disfigured decompose and plug the carburetor as time goes on.
Wash the carburetor cleaner off of the metal parts by washing them in warm, soapy water then rinsing with clean water. Dry them by blowing it off with compressed air. Make sure that all the passageways are blown dry before reassembling.
Reassemble using a NEW carburetor rebuild kit.
DO NOT TRY TO REASSEMBLE WITHOUT USING A COMPLTE CARBURETOR KIT! You will just end up having to do the job again.
ALWAYS clean the fuel tank and replace the fuel line when doing this repair or you may have to do it all over again. The inside of the fuel line disintegrates over time and these small pieces of rubber will plug up the carburetor too. Dirt and water from a dirty fuel tank will also plug up the carburetor. Find the Model, type and serial or code numbers off of the engine and take them to your local dealer to get the carburetor repair kit.
If you do the work yourself, take pictures or at least make a drawing of where all the linkages, gaskets, and component parts go. Correct reassembly is critical.
If the carburetor still doesn't work correctly, you may have to take it to someone who has an "Ultra-sonic" cleaning machine. This machine uses carb cleaner and ultrasonic vibrations to get the very small passageways clean when traditional methods fail.
If you don't feel comfortable with this kind of repair I would suggest sending it to a reputable shop.
The other possibility is that the muffler screen may be plugged with carbon...restricting the exhaust. Remove the front part of the muffler and check to see if it is restricted with carbon.....I also have had wasps build a nest in the muffler that will restrict it. I don't know why they like mufflers, but they do.
Also make sure that you replace the spark plug.
Although the probability that the carburetor is still very high. Even if you ran it out of gas before storing, there is always 6 to 10 drops of fuel left in the carburetor that will change to gum and varnish. This will loosen while it is used and then will find it's way into the small passageways and restrict the carburetor.....even if it has been running perfectly for several usages.
I am glad you found the problem. Keep in mind that this is not a normal problem that can be diagnosed over the internet. Please feel free to contact me any time if you have another question. Just a note to try to help. If you have the option to get a different unit, please make it something other than a Ryobi. We have had MANY problems with this brand.